It is more likely that lack of trust is the result of failed or corrupt governments than any historical or religious cause. When nepotism and corruption replace the rule of law, citizens will trust only their family or, to a lessor effect, their family's allies.

Is it religion or is it tribalism? Industrial development needed trust and trust needed he rule of law not the rule of men. Tribalism is the opposite of the rule of law. Justice is impossible in a tribal based socio-political system. If a system acknowledges the validity of the tribalist outlook sharia or any other body of law will be secondary to tribal head-oligarchic injustice. need we ask how far back tribalism has reigned in the middle east?

In the frame of History of religions, Islam, including Sharia, as taught by Mohammed is probably a religion that is analogous or closely related to what was purportedly taught by Jesus. When Jesus said things like "If you want to follow me (read follow the teaching of Jesus), give away all your riches to the poor", "It is more difficult for a wealthy person to enter the kingdom of heaven than for a camel to go through the eye of a needle (read it's impossible to look inside when focus on the outside)", "the greats of this world are the smaller ones in the other world (read the rich and powerful in the manifested world are spiritually atrophic)" etc, he was already in line with the likes of Mencius "If you are wealthy you cannot be benevolent, if you are benevolent you cannot be wealthy" and Hinduism as voiced later by Ramakrishna "The people that are farthest to God are the bankers, the lawyers and the physician (read the bigger your ego, the lesser your chances to overcome duality)" etc... As nobody knows exactly what Jesus really said, it is easy to make his instructions optional, the subject of reinterpretation or even to turn them upside down, however I am not sure that this is the case for the teaching of Mohammed. Sharia, if meaning "way", is more conservatively to be understood as "way (to God)" rather than "way (to profit or business)".

With all due respect, this is a very shallow statement. Any ethnic minority would develop such norms due to their disadvantaged position at the society. Here I would refer you to Porter & Sensenbrenner (1993).

One last note: Islamic law and interest rates do not match; therefore, I invite you to dig deeper for the root of this phenomenon, and don't settle with the easy choice.

Low trust is likely related to high corruption and the lack of "rule of law". Islamic law, if applied without corruption, would improve the situation, especially since the percentage of non-muslims is quite low.

If you want to make a case against islamic law there are much better arguments, like its prohibition on interest (which hampers the economy), its subordination of women or its rigid structure.

Any society which base it's common law on one religion is so be left behind in who society is developing. It will cause stagnation. Today we point fingers at the muslim countries, but a few centuries it was a problem in Asia, then even earlier it was en Europe. And evne Rom was eventually brought to it's knees due to a static belief system.

I am an admirer of Prof. Kuran's. Nevertheless, I believe he overstates the case.
Trust will be low in any region recovering from despotic government of a supposedly Socialist type. Islam attracts support precisely because it appears to be the only countervailing power over crazy despots pursuing ruinous economic policies.
Thus, when the Shah of Iran decided that the way to bring down the price of bread was to jail bakers rather than tackle the infrastructural and institutional factors causing the economy to overheat, the 'bazaari' middle class gravitated towards Ayatollah Khomeini who had been proved right in his opposition to the 'White Revolution' which caused a huge influx of former tenant farmers into the shanty towns of the cities.
Some Islamic Sects or endogamous 'castes' have flourished precisely because they have speedy and equitable community based arbitration and adjudication. Interestingly, they have also modified their 'waqf' laws along the lines Kuran suggests. It may be mentioned that the founder of Pakistan, Mohammad Ali Jinnah was from one such sect and was an early advocate of waqf reform.
It must be mentioned that Economics Professors have played a part much greater than the Islamic Religion in undermining trust in some Muslim countries. Thus, the very brilliant Mahbub ul Haq unwittingly paved the way for Bhutto's decimation of Pakistan's mercantile elite and, decade after decade, brilliant young economists and political scientists have come forward as apologists for corrupt rent-seeking regimes.
It is interesting that when Muslim merchants compete on Trade routes not dominated by an Islamic power then they have no difficulty adjusting their behavior. Problems arise, however, when local grandees put the squeeze on such merchants- but this is a problem of an essentially political, not religious, sort.

well said Vivek.
just to add a bit more to your angle...
studying "comparative law" reveals that the Islamic laws itself are superior...but the issue is that Muslims are not following these laws - the problem is the followers not the theory - you can't balm a medication if the patient doesn't take it! thus I do blame Muslims not the Islam itself.

the very fundamental law that I like the most is the one which states that: No harm ....
means you shouldn't harm anyone, any creature, the environment and of course yourself. and not to help or allow any harm as long you can prevent within the given authority - I believe that one is a king ....if being followed!

"I am so sorry as I am busy to reply to Prof. Kuran today, may be I will do sometime later."

Project Syndicate at its best. A scholar discusses his own research and offers a new perspective on a current topic.
I wish we had more articles like professor Kuran's. We get too many op-eds written by "thought leaders" who feel entitled to stray from their expertise and spout platitudes on whatever tickle their fancy.

Thoughtful and informative article. Thanks. When sharia law was created, it was a "killer app" that enabled people to more effectively do business, especially launch caravans and later divide the spoils. As I recall, sharia law was created by merchants. But as the world changed, it didn't. Western corporations superseded them. Might sharia be updated to reflect modern realities? I realize the difficulty of this in a polarized Islamic world.

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